The European Commission imposed anti-dumping duties on imports of Chinese solar panels yesterday, defying German-led opposition and dire warnings from Beijing that the move could spark a trade war.
The commission decided "unanimously" to impose punitive tariffs on solar panels from the mainland, after finding they were being sold at up to 88 per cent below cost in the European market, said the EU trade commissioner, Karel De Gucht.
De Gucht said it was clear that the dumping was harming the European solar panel industry, with 25,000 jobs threatened as Chinese companies took 80 per cent of the market.
Accordingly, the commission would levy an average tariff of 11.8 per cent from June 6, rising to 47.6 per cent on August 6, in the absence of negotiations based on a commitment by Beijing to address the problem, he said.
"I want a fair solution with China," De Gucht said, adding that yesterday's decision opened the way to talks, if Beijing wanted them. "The ball is now in China's court," he said.
De Gucht insisted that the measures were not protectionist but rather within the EU's rights under international trade law to protect its interests.
China has solar panel production capacity equal to 150 per cent of world demand, he said, and that meant they were manufacturing too much.
The tariffs are provisional for six months, with EU member states having a vote in December on whether to make them permanent.
In recent weeks Germany has led growing opposition to the move, winning the support of 17 other member nations, including Britain, but not France.
Berlin says the tariffs are not needed, stressing the wider trade relationship with China, which was worth some €500 billion (HK$5 trillion) last year.
But De Gucht said it was up to the commission, the EU's executive arm, to make the final decisions, as it saw the bigger picture.
The German economy minister, Philipp Roesler, said as the announcement was being made that it was "a serious mistake", with Berlin firmly opposed.
The German Chancellor, Angela Merkel, said late last month as she hosted Premier Li Keqiang, that Germany would do all it could to resolve the problem without tariffs. The EU and China now find themselves locked in a series of trade disputes, ranging from solar panels and telecommunications for Brussels, to chemicals and steel tubes for Beijing, amid concerns they could lead to a broader trade war.
China had warned last month that introducing tariffs on solar panels could result in just that outcome, which both sides also say they want to avoid.